Again on trade elasticities

What is it about?

This paper focuses on trade elasticities by analysing the case of China, France, Germany, Italy, Japan, UK, and the USA over the period 1990–2012. While the empirical setting mainly refers to panel data techniques for non-stationary data, the VECM model complements the analysis at single-country level. We find that exports and imports are price inelastic for most of the countries in the sample. Furthermore, exports and imports are determined by domestic and foreign income, with asymmetric income elasticities.

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